Brokerage and insurer dollar deposits are being monitored with extra vigilance as the multi-trillion-dollar economic stimulus packages planned by the Joe Biden administration threaten to flood foreign exchange markets.
Stocks tumbled by more than 1.6 percent on Tuesday, putting an end to a five-session winning streak on renewed concerns about the coronavirus. The Korean won fell against the U.S. dollar for the first time in six trading days.
The depreciation of the U.S. dollar is raising red flags at companies that export.
Korea’s main bourse hit another new high on Friday, going above the 2,700 level for the first time in history as foreign investors continued their buying spree, mainly in the semiconductor and internet sectors.
The closing figure for the Kospi is displayed in a dealing room at Hana Bank in Jung District, central Seoul, on Tuesday. Seoul’s main bourse closing at 2,63.25 after gaining 42.91 points, or up 1.66 percent from Monday.
As the dollar drops rapidly on aggressive economic support measures in the United States, speculators are buying up the U.S. currency on hopes of a rebound.
An employee stands in front of screens Monday at a dealing room in Hana Bank, Jung District, in central Seoul.
Stocks gained Monday for a second consecutive session as investors continued to look for deals despite the resurgence of coronavirus cases nationwide. The won fell against the dollar.
According to data from the Bank of Korea, foreign exchange reserves came to $416.53 billion as of the end of July, up $5.8 billion from a month earlier.
Stocks rallied Monday on hopes of economic recovery led by the government's extra budget and possible robust earnings from tech companies. The won rose against the dollar.